Dave Armstrong

Case Study Memo #2

From: Aurash Khajehnouri

Discussion: 14733

Re: Case Memo #2: Dave Armstrong

#1

Dave Armstrong is faced with the problem of choosing between three jobs with different risks, benefits, and titles. Not only does he need to make the decision in a limited amount of time, but he also has to take into consideration other factors like personal satisfaction and his family. His objective is to choose the job that would suit his personality best.

What's risky about Jobs A and B is that they both require Armstrong to contribute personal funds which he may end up losing. Alternatively, if he does invest this money, there is a chance that his gamble pays off and the job becomes very profitable. When faced with Job C, not only does it provide Armstrong with nearly no risk because he is not required to invest any personal funds, but it also pleases his family because there is high job security. However, this job also provides Armstrong with the least personal satisfaction.

#2

The most relevant elements in Armstrong’s decision are his personal satisfaction along with the potential reward each job has to offer.

Job A is most risky because it has the most personal funds on the line, however it is also a preferred option because he would be working with someone who he has experience with in the past. Job B is a short term, yet highly profitable job that would be taking advantage of a industry in recession. This job would only last for two years but it could become very profitable and he would meet many new contacts. Job C is the most secure job because he would not be inputting any personal funds. However this job also has the lowest personal satisfaction for

him.

#3
After comparing each Job’s risk vs. reward factors, I would recommend Armstrong to choose Job B because it the most balanced choice. Job B has enough risk to keep Dave interested while still pleasing his wife as well because this job choice has more security than Job A. Also, this job has a greater salary than Job C and it could potentially have an even higher profit than Job A. Lastly, although Job B is only operable for around two years, Dave is going to expand his list of contacts within this two year span. After these two years are over, Armstrong will have hopefully made a substantial profit and he can move onto more high risk projects with his new contacts.

#4
The problem facing Armstrong is incredibly difficult because each job option has potentially large downsides. Job A requires a large input of personal funds which he would lose. Job B also requires the input of personal funds and he would only be working for two years. Job C high high job security but is not personally satisfying.